This commercial law newsletter provides a brief summary of the latest developments and updates in the month of July 2023 through judgments, notifications, circulars, and other updates in the commercial sector in India including Arbitration, Taxation, Insolvency & Bankruptcy, etc.
Supreme Court upheld the view taken by NCLAT that it can recall the judgment but can’t review it
The Supreme Court of India refused to interfere in the judgment of the 5-judges bench of NCLAT which has held that the power of review is not conferred upon the NCLAT. It was further held that the NCLAT has the power to recall its judgment by invoking inherent powers under Rule 11 of the NCLAT Rules, 2016.
[Union Bank of India vs. Financial Creditors of M/s Amtek Auto Limited Civil Appeal No. 4620/2023]
Writ of Prohibition can’t be issued to prevent the creditor from approaching the NCLT
The High Court of Delhi opined that when an alternative remedy exists, then the Petitioner must prove, (i) that the proceedings or actions being taken are wholly without jurisdiction; and (ii) as to why the alternate forum must be deprived of an opportunity to decide upon its own jurisdiction. The Court refused to issue a Writ to prevent the creditor from approaching the NCLT under Section 95 of IBC against the personal guarantor.
[Vineet Saraf v Rural Electrification Corporation Ltd. 2023/DHC/5049]
Non-consideration of a clause in an agreement by the Arbitrator will not render the arbitral award patently illegal
The High Court of Delhi held that non-consideration of a clause of an agreement cannot be said to be an error made by the arbitral tribunal which is opposed to the fundamental policy of Indian law, nor can the same be said to be patently illegal.
[National Highways Authority of India vs GVK Jaipur Expressway Private Limited 2023/DHC/4401-DB]
An insufficiently stamped agreement can’t be a ground to set aside arbitral award
The High Court of Delhi while keeping in view Supreme Court’s ruling that an Agreement containing an arbitration clause that is not properly stamped, cannot be admitted in evidence, held that once the Agreement has been admitted in evidence by the Arbitrator, who has passed an award by relying on the said Agreement, the award cannot be set aside on the ground that the Agreement was insufficiently/improperly stamped.
[ARG Outlier Media Private Limited vs. HT Media Limited 2023/DHC/4366]
Notification under Section 14 of the Insolvency & Bankruptcy Code, 2016 (“IBC”)
The Ministry of Corporate Affairs released a notification stating that provisions of sub-section (1) of section 14 of IBC (which talks about moratorium to be imposed on the insolvency commencement date by the Adjudicating Authority) shall not apply where the corporate debtor has entered into any of the following transactions, arrangements or agreements, namely: -
(i) the Production Sharing Contracts, Revenue Sharing Contracts, Exploration Licenses and Mining Leases made under the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) and rules made thereunder; and
(ii) any transactions, arrangements or agreements, including Joint Operating Agreement, connected or ancillary to the transactions, arrangements or agreements referred to in clause (I).
The notification can be accessed here.
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